Physicians in Louisiana may find themselves holding the short end of the stick very soon, as the state struggles to figure out how to make up a sudden $859 million shortfall in Medicaid funding.

And it comes at a time when the state’s Republican governor, Bobby Jindal, has said that he will not take any additional federal money to expand the Medicaid program in 2014, as offered under the Affordable Care Act. He also said he would not accept federal funds to set up health insurance exchanges under the law.

If any hospital or physician wanted to know what it would feel like to go without that federal money, they now have their chance. The $859 million hole is the result of a reduction in the federal matching rate that Congress approved as part of the transportation bill that was signed by President Obama on July 6.

The provision affects only Louisiana. After Hurricanes Katrina and Rita, the state received hundreds of millions in aid. But there was no adjustment at that time in the federal Medicaid matching rate. So Louisiana’s Medicaid program was the recipient of millions of dollars more than what it was due. (For more on this byzantine situation, see the New Orleans Times-Picayune’s story here.)

Congress fixed that error in the transportation and student loan bill by dropping the state’s current match rate. But Gov. Jindal, in creating and finalizing his fiscal 2013 budget, was, ironically, depending on that federal money.

On July 13, his administration announced cuts to make up the shortfall. The decrease in the federal matching rate meant that the state had to come up with $287 million in cuts on its own; the rest of the $859 million will come from reductions in pay from the federal government.

According to the state Dept. of Health and Human Services, $518 million will come out of the pockets of physicians and hospitals. The state already had announced an across-the-board almost 4% cut in Medicaid provider rates for fiscal 2013.

Under the latest cuts, the Louisiana State University system is taking the biggest hit: $329 million, or a quarter of its budget, according to news reports. LSU is one of the biggest charity care providers in the state. Interestingly, DHHS commented in its press release that it “does not anticipate this reduction of [disproportionate share hospitals] and Medicaid payments to affect Medicaid recipients’ access to hospital care.”

Among the other programs absorbing blows: the Greater New Orleans Community Health Connection (GNOCHC), a pilot that expanded health coverage to uninsured adults in the wake of Hurricane Katrina. Another program that provided family planning services to low-income women will have its qualifying income limit reduced from 200% to 133% of the Federal Poverty Level.

The state is also tightening its review of eligibility for all Medicaid recipients.

After the cuts were announced, the Louisiana Hospital Association said in a statement that, the total elimination of DSH payments to rural hospitals “will be critical and will lead to reductions in services and possible hospital closures.” That in turn will leave ” gaps in healthcare delivery for patients in rural areas, as well as economic losses to those communities,” said LHA.

With hospitals across the state possibly delivering less care, it seems likely that physicians could expect to see more pressure on their practices.

The question of what to do about Medicare’s Sustainable Growth Rate formula, which governs physician pay, likely got its final serious look on Capitol Hill on July 11–that is, before Congress heads out the door for a protracted summer recess and then gets caught up in the fall campaign season. And it wasn’t much of a look.

The Senate Finance Committee held its third and final “roundtable” discussion on the SGR, this time allowing physicians to weigh in. Representatives from the American Medical Association, American Academy of Family Physicians, American College of Surgeons, American College of Cardiology, and American Society of Clinical Oncology politely answered questions from committee members who showed up. Most of the Democrats on the committee sat in, at least for a portion of the almost two-hour meeting, while only two Republicans attended–John Kyl (Ariz.) and John Thune (S.D.), who came for only the last half hour.

The discussion meandered quite a bit and quite often, with physicians talking about the need for aligning incentives, creating medical homes, and rewarding quality. Dr. W. Douglas Weaver, a past president of the ACC and current Vice President and Systems Medical Director of Heart and Vascular Services, Henry Ford Health System in Detroit, said that the instability caused by the ever-fluctuating SGR situation was thwarting efforts to create new delivery systems.

But there was little concrete discussion of what to do to avert the 27% cut mandated by the SGR that will take effect January 1, 2013.

Senator Max Baucus (D-Mont.), who chairs the Finance Committee and led the

roundtable, at one point said that while he was hearing great ideas, he wanted to know what action could be taken quickly. Senator Kyl also tried to steer the discussion back to the practical. He also reminded physicians that Congress is driven by 10-year budget-setting imperatives; thus, any suggestions for the SGR proposed for the short term must also work over the long haul, he said.

The elephant in the room: how to pay for an SGR fix or replacement, now clocking in at about $300 billion and rising. Physicians have steered clear of suggesting any financial solutions.

The committee broke with no promises. In an interview afterwards, Dr. Glen Stream, AAFP president, said that any SGR tinkering would likely be put off until at least after the November election. That puts the onus on a lame duck Congress.

Do you think they will make a short term fix or come up with some kind of permanent solution?

Participation in clinical trials — and cancer trials in particular — is agonizingly low. The National Cancer Institute has estimated that less than 5% of patients participate in cancer trials. But that could possibly change with the growing availability of applications for smart phones and tablets that instantly link clinicians and patients with ongoing trials.

Screenshot of Lilly Oncology Clinical Trials Resource

Just as the American Society for Clinical Oncology was starting off its annual meeting, Eli Lilly announced that it was launching a clinical trials app. According to Lilly, the free app is available for the Apple iPad and iPhone, the RIM BlackBerry, and the Google Android. Physicians — or patients — can use the app to search oncology trials that are enrolling new patients by disease state, molecule being studied, study phase, country, state, and keyword.

The Lilly app also links patients and clinicians to resources such as support groups, financial help, and nutritional counseling, for instance. Because it was developed by a drug maker, it also prominently features a search tool for Lilly-sponsored trials. Other than that, it appears to be very comprehensive and easy to use.

Lilly is not the first manufacturer to venture into a trials app. Last June, GlaxoSmithKline, in partnership with MedTrust Online LLC, launched a similar app that lets users search for trials for all cancer types. Unlike the Lilly app, it does not try to push users towards GSK-sponsored trials. It, too, appears to be very comprehensive and easy to use.

Screenshot of MedTrust search

The National Cancer Institute also has a free app, but only lets patients search for trials at the National Institutes of Health campus in Bethesda, Md. As I attempted to explore the app, however, it crashed multiple times. Not a good omen.

Similarly, the Seattle Cancer Care Alliance has created an app — but it is narrowly focused only on trials for acute myeloid leukemia at its member facilities.

iHealthVentures LLC has created an app with the snappy name of “Clinical Research Trials” that allows users to search all of clinicaltrials.gov database. It costs $1.99.

As more Americans turn to smartphones and tablets to manage their lives and health, these trial apps could come in handy. And maybe even save or extend lives by getting people enrolled earlier in protocols that could help them.

Just an aside — OncologyPractice.com has a link to ongoing trials on its website here. And it has just launched a free app that features the latest news and views in the field.

Patients who can’t get in to see their primary care physicians on a timely basis–or when it’s convenient for them–seem to be increasingly voting with their feet, seeking care at retail clinics or after-hours urgent care centers. And that seems to be one factor that’s expected to drive down the cost of health care next year, says PriceWaterhouseCoopers.

Image Courtesy CVS Caremark

The accounting and consulting behemoth released its annual “Behind the Numbers” report on health cost trends. Health spending has been lower than expected for the last three years and will likely stay low, rising by about 7.5% in 2013, according to the report.

PwC found that one of the slowest areas of growth is physician spending. From 2007-2012, spending on physician services by private health plans grew only 5.4%–compared to 8% growth for inpatient care and 10% for outpatient hospital care. They slowdown in doctor spending “is expected to continue in 2013 as consumers choose alternatives to the traditional doctor’s office visit,” said the report. Those alternatives include “lower-cost options such as workplace and retail health clinics, telemedicine, and mobile health tools,” which are viewed by employers and consumers “as cost effective and convenient.”

In 2010, about 17% of consumers said they had sought care at a retail clinic; by 2011, that had risen to 24%, according to a PwC survey conducted each year to help flesh out the medical spending picture.

It’s no secret that use of retail clinics and urgent care centers has skyrocketed. Last fall, the RAND Corp. reported that there was a ten-fold increase in use of those retail clinics between 2007 and 2009. Using data from a commercially-insured population of 13.3 million, RAND determined that 3.8 million made at least one clinic visit between 2007 and 2009. Monthly visits jumped from 0.6 per 1,000 in January 2007 to 6.5 per 1,000 in December 2009.

Interestingly, availability of primary care physicians did not seem to be a factor in determining use. Those who went to retail clinics tended to be in good health, between 18 and 44, and have a higher income.

In other words, those are paying customers who are choosing to spend their money elsewhere for their care. PriceWaterhouseCoopers advises physicians to make their pricing “defensible” to help stem the tide of patient outflow to these clinics.

One reason why consumers may be going to a lower-priced environment: because employers are increasingly asking workers to shoulder more of the costs of their care. And that is expected to continue.

“We’re seeing long-term trends that could keep cost increases in check,” said Michael Thompson, principal, human resource services at PwC in a press release. “As employers shift expenses to their employees, for example, these workers are pursuing lower-cost alternatives. Even as the economy strengthens, changes in behavior by employers and consumers may help limit medical growth.”

Yep, that’s a shameless bid to appear higher on Google search results, but it’s also a pretty good metaphor for what’s happening in Washington in advance of the Supreme Court oral arguments on the Affordable Care Act–due to be heard March 26, 27 and 28. Although speculation about how the Justices may rule has been going on for months, the gambling has reached a fever pitch.

ALICIA AULT/IMNG Medical Media

Next week is to Court Watchers as the Final Four is to legions of NCAA Division 1 basketball fans: The brackets have been completed; it’s just a question now of who will come out on top.

Conventional wisdom has the Supreme Court splitting along perceived “party lines” in a 5-4 vote either in favor of upholding the law, or against it.

But with the Justices taking on three separate, major issues within the law, Washington wonks, soothsayers, and legal eagles have gone into a frenzy of handicapping. Not a day goes by without a backgrounder or briefing that professes to have the best read on the tea leaves.

The Court, as is its wont, has shied from the limelight. Until today, it had not even determined how it would accommodate the legions of journalists (myself included) who will descend upon the courtroom to cover the historic arguments. Details are still being worked out, but one thing was not going to change: the Court has steadfastly refused to allow audio or video broadcasts of the proceedings. (Which means there cannot be any contests requiring a shot every time the challengers’ attorney, Paul Clement, utters “individual mandate.”) The Court is even banning–heaven forbid–cellphones. That means no pithy Tweets on Justice Clarence Thomas’ enduring silence.

This morning–at a briefing sponsored by Politico–came new predictions from an estimable panel of D.C. insiders: former U.S. Solicitor General Walter Dellinger, Neal Katyal, Al Gore’s co-counsel at the Court in Bush v. Gore, Tom Goldstein, a former Court clerk and publisher of Scotusblog, Kevin Walsh, a former clerk to Justice Antonin Scalia, and Nina Totenberg, the veteran Court correspondent for NPR.

Dellinger, Goldstein and Katyal. ALICIA AULT/IMNG Medical Media

The Justices to watch, said Ms. Totenberg: Anthony Kennedy and Chief Justice John Roberts. They are both widely considered swing votes. Some have also have put Justice Scalia in that camp, “which I personally think is a crock,” Ms. Totenberg said. Mr. Katyal said that Samuel Alito could also be “in play.”

Will politics come into play? Justices “have a grasp of politics that defies imagination in terms of its inaccuracy,” said Ms. Totenberg, who, like the others discounted the idea that the Justices would be influenced–or motivated–to vote in one direction or another based on the prevailing political winds.

The panel was unanimous–except for Ms. Totenberg, who recused herself from making a wager–in its opinion that the Court would uphold the law, most likely in its entirety.

Mr. Goldstein said he could not effectively imagine a victory by the law’s challengers. If the Justices threw out the Act, it “would lead to probably an array of attacks on different parts of the federal regulatory state because for the first time you would have had five justices that take very seriously limits on congressional power,” he said.

By the end of next week, the Court will likely hold one closed-door conference and a series of votes, said Mr. Walsh.

He and the other panelists went out on a limb, saying that the 5-4 prediction may no longer hold. Mr. Goldstein said it could even be a 6-3 or 7-2 ruling upholding the law.

So who will write the opinion, expected to be issued in June? Mr. Dellinger predicted that it would be Justice Roberts. Mr. Goldstein, however, said this might be the rare case where the Court issues a per curiam opinion—that is, written in the name of the Court, rather than by any of the Justices. Interestingly, Bush v. Gore was a per curiam decision.

Gulf Coast residents who may have been made sick — or who may become sick in the future — as a result of the April 2010 Deepwater Horizon oil spill may now be able to make a claim against BP. The oil giant announced on March 2 that it had reached an agreement in principle for a settlement with the attorneys representing the thousands of plaintiffs in the massive case.

Overall, the company says it will make almost $8 billion available — about $5 billion will go toward health claims.

Photo by Alicia Ault/IMNG Medical Media

In a sense, it is opportunity No. 2 for the fisherman, shrimpers, restaurant and hotel owners, and hundreds of thousands of others who make their living or just live in the areas affected by the spill. BP had already set aside $20 billion — in June 2010 — to pay mostly economic damage and other direct economic claims.

At that time, there was an outcry about the lack of any dedicated funds to cover mental health issues or physical illnesses that might arise out of the oil spill. I blogged about that here, in an earlier post.

In the almost 2 years since the disaster, BP says it has paid “approximately $6.1 billion to resolve more than 220,000 claims from individuals and businesses” through the trust fund, known as the Gulf Coast Claims Facility. It has been administered by Kenneth Feinberg, not coincidentally, the man who also oversaw the claims process for the Sept. 11 Victim Compensation Fund.

According to lengthy article in the New Orleans Times-Picayune on the proposed settlement, Mr. Heisenberg is now stepping down and another special master will take over administration of the Trust Fund.

The proposed settlement — which will come out of the $20 billion Trust Fund — has one agreement to address economic loss claims and another for medical claims. For those who have a qualifying medical claim, there is essentially a 21-year statute of limitations. It’s likely taking into account that some conditions — such as cancer — may take that long to show up in clean-up workers or others exposed to either the oil or the chemicals used to mitigate the disaster.

BP is also making $105 million available “to improve the availability, scope, and quality of health care in Gulf communities.” The money will cover an expansion of primary care, mental health services, and access to environmental health specialists, according to the company.

If the agreement in principle goes into effect, the plaintiffs who eventually get paid will release BP from future liability claims.

Republicans on the House Energy & Commerce Committee took President Obama to task on Tuesday in a short video that accused him of doing nothing to fulfill a promise made in last year’s State of the Union address to address medical liability reform.

Courtesy Wikimedia Commons/johnfekner/GNU Free Documentation License

With its eery, conspiratorial music and accusatory title fadeouts, I half expected to see Gary Oldman in a bespoke suit proclaim that the Joe Biden is a mole. (That reference may be lost on those of you who have not seen Tinker Tailor Soldier Spy.)

Indeed, in that January 2011 speech, according to a fact sheet issued by the White House,

…the President pledged to work with Republicans to support state reforms of medical malpractice systems to bring down costs and improve care – building on Administration efforts already underway to assess what works in medical malpractice reform.

The House Republicans charge that they’ve reached out to the White House but have had no response.

About 134 House members — Republicans and Democrats — have put their names on a bill to overhaul the medical liability system that was introduced in Jan. 2011 by Rep. Phil Gingrey (R-Ga.).

Physician organizations have en masse backed that bill, H.R. 5. But it has languished since May last year when it was reported out of the Energy & Commerce Committee.

Meanwhile, the Obama Administration did offer up an olive branch on tort reform in the Affordable Care Act. But nothing has come of that, either.

The ACA authorized $50 million in grants to states looking to demonstrate new models. The Agency for Healthcare Research and Quality was charged with managing the program, and it put out requests for proposal in Nov. 2010. The funds were supposed to be available beginning in Oct. 2011 but, according to an AHRQ spokesperson, Congress has not yet appropriated the funds for the initiative.

That means no grants have been issued under that program, although the AHRQ has funded other liability reform projects through an initiative announced by President Obama in the fall of 2009.

The leading GOP presidential candidates have promised that they will address medical liability reform. But even if a Republican does take the White House in November, the fulfillment of that promise is likely a long way off.